We are pleased to submit this letter of comment in response to the Commission's request contained in Securities Act Release No. 34-47069 relating to the mandated electronic filing and website posting of Forms 3, 4 and 5.

Based on our review and our discussions with a number of our clients, we respectfully suggest that the Commission consider making several changes to its proposal in order to improve the ease of complying with the filing and web posting requirements. As discussed below, we suggest that the Commission allow filings to be made 24 hours a day and permit filings received before midnight to be deemed filed on the same day. In addition, we urge the Commission to increase the alternative formats in which electronic filings may be submitted. We discuss the difficulties that issuers will have in making website postings within one day of filing with the Commission where the issuer does not know in advance that the filing will be made. Finally, we suggest that the Commission amend the language of proposed Rule 16a-3(k) to reflect its intention that hyperlinking to a third-party website satisfies the web posting requirement.

Permit Filings Made Before Midnight to be Deemed Filed on the Same Day

The Commission has proposed that Forms 3, 4, and 5 would be deemed filed on the day received by the Commission if the electronic transmission of the Form begins before 5:30 p.m., Washington, D.C. time. Filings that begin after 5:30 p.m. would be deemed filed the next day. We believe this deadline will be difficult for reporting persons that must file Form 4 within the two-business day deadline (particularly those in Western time zones). It will also be difficult for the Commission, which will need to accommodate large numbers of individuals with filing responsibilities. Accordingly, we urge the Commission to consider a different policy.

We suggest that the Commission adopt a 24-hour-a-day policy for the receipt of electronic filings. We would propose treating all filings for which an EDGAR acceptance message is received before midnight on any day as being filed on that day for purposes of the filing deadlines. We are aware that in the past the Commission has opposed making the system available 24 hours a day because time is required for system maintenance and backup and budgetary constraints limit the availability of filer support staff.1 However, these positions were adopted long before Congress decided to require Section 16 forms to be filed within two business days of a transaction. We believe that technology has advanced to the point where the Commission should be able to perform maintenance and backup without disrupting acceptance of filings.

If a 24-hour-a-day filing policy is not possible for some reason, we would still urge the Commission to adopt the same approach for Section 16 forms as it has for Rule 462(b) filings, which are deemed filed on the same day if received by the Commission before 10 p.m. The fact that other EDGAR filings must be made by 5:30 p.m. to be deemed filed on the same day is not a persuasive reason to adopt the same approach with respect to Section 16 filings. In light of the large number of individuals with filing responsibilities and the fact that Form 4 filings must be made within a two-business day deadline, we believe that it is necessary for the Commission to extend the time available to at least 10 p.m.

Improvement of Filing Options

The Commission states that it will be adopting a new filing system that will provide insiders and those who act on their behalf a means to fill out and submit forms online. While we support this idea, it is not possible to determine whether it will be workable without considerably more information about the system. In any event, we think the Commission should continue to allow the traditional EDGARLink filings and also provide filers with alternative formats in which to submit electronic filings.

At present, filers can either ask the issuer to make their Section 16 filings, hire a third-party service or a lawyer to complete the forms on their behalf or attempt to navigate the Commission's proposed online system on their own. The Commission notes that this system will require data entry to be performed quickly enough to avoid time-outs and will not provide a way to save an incomplete form from session to session. We suggest that the Commission look for ways to improve the technology of the system so that incomplete forms can be saved from session to session or filers can complete the form offline before submitting it online. Even if these technological improvements are made, we doubt that insiders will find it easy to use this system by themselves.

It would be much easier for filing persons if the Commission would allow Section 16 filers to make electronic submissions in .pdf format. There are several reasons why such an approach would be favored. Under the shortened reporting scheme for Form 4, there is limited time for reporting persons to involve third parties in the preparation of their forms, therefore making it increasingly important that these forms be able to be completed by reporting persons themselves. Second, filling out a form in .pdf format would allow filers as much time as they need to complete and review the form, as well as the ability to save a partially completed form. Finally, .pdf format will enable filers to comply with the form instructions by easily attaching or including exhibits when line item or footnote space is insufficient. The .pdf technology is widely available and is free of charge. Most importantly, providing filers with the ability to use .pdf format would be consistent with the Commission's goal of creating a system that insiders can use themselves. Providing an alternative that many filers will be more technologically comfortable with would also increase the efficiency, accuracy and quality of disclosure to investors.

Finally, we are concerned that when the new online filing system discussed in the Release is operational, the Commission will apparently eliminate the ability to make traditional EDGARLink filings entirely. Under the new system, there will be a textual limitation on footnotes and additional information that would otherwise be placed in a footnote will be required to be placed in an exhibit. We are especially concerned about filings made by groups and affiliated ten percent stockholders who currently use elaborate footnotes explaining the relationship between the members of the group, sometimes cross-referencing documents filed on Schedule 13D. It may take many hours to properly fill out and check a Form 4 prepared on word processing equipment and currently filed in paper format. Such documents can be converted to traditional EDGAR format and filed through the EDGARLink system. We are concerned about the prospective elimination of this filing method for these complex forms, since it appears from the discussion in the Release that it will be difficult to complete these forms online. Of course, we would prefer a system that relied on Schedule 13D filings and eliminated Section 16 filings for ten percent stockholders, but as long as Section 16 requires ten percent stockholders to file reports of transactions within two business days, a realistic method has to be found whereby they will be able to make these filings. We strongly encourage the Commission not to abolish the ability of filing persons to make Section 16 filings in numerous different ways.

Ability of Issuers to Make Prompt Website Postings

We are seriously concerned about the ability of issuers to make prompt website postings of Forms 3, 4 and 5 that are made by filing persons who make their own filings, i.e., where the issuer does not know in advance that the filing will be made. At present, Rule 16a-3(e) requires a filing person to send or deliver a duplicate copy of a form to the issuer's corporate secretary or other person designated to receive filings not later than the time the form is transmitted to the Commission for filing. In practice, many filing persons will send a paper copy to the issuer by certified mail on the same day that they deliver the filing to the Commission in Washington D.C., and this copy will not be received by the issuer until several days later. In order to enable the issuer to make a website posting not later than the end of the business day after the filing has been made with the Commission, as required by the Sarbanes-Oxley Act, the issuer will need to receive a copy of the filing at or about the time the filing is made with the Commission. Of course, the Commission could simply mandate that filing persons deliver a copy of the filing to the issuer on the same day that they file with the Commission or on the next day, but this would be very difficult for many filing persons to comply with - and many would not - unless it were possible to send an electronic copy to the issuer.

There are several ways that this problem could be addressed. One way would be for the Commission to design the EDGAR system to send to an issuer copies of filings received by EDGAR that pertain to the issuer, possibly excluding those filings that had been made by the issuer itself. Another way would be for the Commission to design the EDGAR system so that the person making the filing could direct EDGAR to send a copy to the issuer. If, as we suggest above, the Commission were to permit Forms 3, 4 and 5 to be filed in .pdf format, issuers could post on their websites, or include in Form 10-K's, 10-Q's and other filings, copies of an e-mail address that could be used by filing persons to transmit copies of filed forms to the issuer. Of course, a filing person could send a document in .pdf format to the issuer even though the filing with the Commission had been made in EDGAR format. However, because the Sarbanes-Oxley Act requires that "a statement" filed under Section 16(a) "shall be filed electronically" and that "the issuer (if the issuer maintains a corporate website) shall provide that statement on that corporate website, not later than the end of the business day following that filing," it is not entirely clear that a filing in .pdf format sent to the issuer would constitute that statement. We believe that the Sarbanes-Oxley requirement that Forms 3, 4 and 5 be "filed electronically" was not intended to limit the methods of making electronic filings to the EDGAR format used by corporations in making corporate filings, or at least that such a requirement would not have been imposed by Congress if Congress had fully understood the limitations on EDGAR technology that are now apparent.

Clarify that Hyperlinking to Third-Party Websites is Permissible

As proposed, Rule 16a-3(k) would require an issuer that maintains a corporate website to post on its website all Forms 3, 4 and 5 by the end of the business day after filing. Although the Proposing Release states that an issuer can satisfy this requirement by hyperlinking to a third-party website, including the Commission's webpage containing EDGAR filings, the text of the rule does not reflect this intent. Accordingly, we suggest that the Commission change the text of the proposed rule to clarify this position in the text of the rule itself.

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We appreciate this opportunity to comment on the Commission's proposal and would be happy to discuss any questions the Commission may have with respect to this letter. Any such questions may be directed to Richard R. Howe (212-558-3612), Robert W. Reeder, III (212-558-3755), Max J. Schwartz (212-558-3936) or John E. Baumgardner, Jr. (212-558-3866).